UK retirees in the EU could see their state pension frozen, warns Altmann

So far, the UK government has only agreed to pay pension increases on a reciprocal basis but there are far more Brits retired in the EU than EU pensioners living in the UK, so there is little incentive for other European countries to agree to pay the pension upratings for retired Brits.

Altmann said: “Those living in Spain could be particularly vulnerable: There are 70,000 British people receiving state pensions in Spain, but only 62 Spanish pensioners in the UK. With such a massive imbalance, the temptation for Spain to make demands that our Government could find unacceptable is obvious.”

For Spain, France and Ireland, the imbalance is significant. Evidence cited by the Commons Brexit Select Committee reports that there are 190,000 pensioners living in Spain, France and Ireland, whereas there are just 5,500 pensioners from the entire European Economic Area living in the UK.

Figures from the Office for National Statistics show that in 2017 the Department for Work and Pensions paid state pensions to around 340,000 pensioners living in the EU (excluding Ireland) but only 85,000 EU residents over age 65 were living in the UK.

Altmann warned: “The risks to state pensions would arise in just a few weeks’ time on a no deal Brexit. The next pension uprating in April 2019 may be withheld from pensioners who retired to EU countries. Even with the prime minister's withdrawal agreement and political declaration, the risk of frozen pensions remains, because no future relationship is agreed.”

However, guidance from the UK government, published on 18 December, states: “The UK leaving the EU will not affect entitlement to continue receiving the UK state pension if you live in the EU, and we are committed to uprate across the EU in 2019 to 2020. We would wish to continue uprating pensions beyond that but would take decisions in light of whether, as we would hope and expect, reciprocal arrangements with the EU are in place.”